1. Introduction
Copyright legislation in New Zealand contains a provision which effectively bans the practice of "parallel importing". This means, the importation of genuine copyright goods for resale by an agent other than the local authorised distributor is prohibited. In 1994, there was a change in the way the copyright holders could enforce the ban, but the substance of the provision remained.
As an input into the debate that occurred prior to the decision to continue the ban in 1994, the Ministry of Commerce and the then Department of Justice commissioned a report by the New Zealand Institute of Economic Research (NZIER) into the economic implications of lifting the ban in three key markets. In the limited amount of time available, the NZIER interviewed a series of participants in the market about the potential impact of lifting the ban. The report was inconclusive due to the complexity of the issues and a lack of data. It did, however, highlight the substantial differences in the application of the ban across different markets.
At that time, there was a degree of uncertainty about whether the ban applied to used copyright goods as well as new goods. Since that investigation, the Act has been used to stop the importation of used goods, although some uncertainty still remains about the basis of those actions.
The Ministry of Commerce is again looking at the issue of parallel importing and has asked the NZIER to provide an in-depth economic analysis of the effects of the restrictions. The analysis is to cover three policy scenarios:
- confirming the parallel importing ban applies to both new and used goods;
- restricting the ban to goods less than 3 years old;
- lifting the parallel importing ban.
The analysis will focus on three key markets for copyright goods: motor vehicles (new and used); books and music compact discs. This selection of markets will provide a good coverage of the issues raised by the parallel importing policies and will hopefully provide adequate information to make general statements about the implications for other products/markets.
We begin by explaining a bit more about how the analysis will be undertaken. Then we will look at the arguments for and against parallel importing. Section 3 critically discusses the literature on parallel importing and presents a framework for analysing the impacts on the New Zealand economy. We look at how other countries deal with parallel importing in section4. The results of the empirical analysis for each of the chosen markets are presented in sections
5,
6, and
7. Conclusions are presented in section
8.
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